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How Do You Motivate Innovation?

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Whenever a company wants something done, the first thought that many executives have is to chuck money at it. The problem facing many of today's organisations is that treating innovation as if it's just another process won't work. Innovation is difficult to measure, meaning that more intricate methods have to be implemented in order for it to be created.

Cash incentives are unlikely to be rejected by a company's employees, but at the same time, there's research to suggest that financial rewards can stifle innovation. A study undertaken by Ariely et al, 2009 found that creativity is rarely encouraged by money as it makes the process transactional. In reality, coming up with something innovative requires something far from transactional, it takes long hours and extra dedication.

As innovation is often created in focus groups, it becomes difficult for a company to determine which individuals should be rewarded. If it's a light-bulb moment by an individual, they might feel hard done by if their idea brings an equal weighted reward across an entire team. Conversely, if the idea bearer gets all the reward, it might create a competitive environment in which creativity is unlikely to flow.

It's because of this that financial rewards should be administered to an entire group and on a regular basis, so that a team is continually motivated. Other motivators might include increased holiday and career advancement for groups that demonstrate that they have the creativity to take the company forward.

It's still unclear which method is best for companies wanting to motivate their employees to be innovative, as there is a crying need for more research to be conducted around the area. It's almost certain however that rewarding individuals instead of groups will demotivate a team, as it will create fractions. It's certainly an interesting space and willl be up to companies to be creative with their reward plans.

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